Will the Old Tax Regime be Discontinued?

By CA Mohammed S Chokhawala

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Updated on: May 30th, 2025

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4 min read

Presently, the new tax regime under section 115BAC is the default tax regime, and the taxpayers have the option to choose old tax regime by filing intimation to the department in the prescribed form

The new tax regime has been growing significantly beneficial for middle income tax payers for the past couple of years. Whereas, the old tax regime remains almost unchanged. This has lead to the question of whether the old tax regime could be discontinued, and if it is still applicable. 

Old tax regime is still applicable for FY 2024-25 and FY 2025-26. And it is expected to continue in the near future.

Old Tax Regime Slab Rates for FY 2024-25 and FY 2025-26

There were no changes made to the tax slabs under the old regime. The tax slabs under the old regime are as follows:

  • Individuals less than 60 Years of Age
Income SlabsIncome Tax Rates
Up to Rs. 2.5 lakhNIL
Rs. 2.5 lakh - Rs. 5 lakh5%
Rs. 5 lakh - Rs. 10 lakh20%
Above Rs. 10 lakh 30%
  • Resident Individuals Aged 60-80 Years
Income SlabsIncome Tax Rates
Up to Rs. 3 lakhNIL
Rs. 3 lakh - Rs. 5 lakh5%
Rs. 5 lakh - Rs. 10 lakh20%
Above Rs. 10 lakh 30%
  • Resident Individuals Aged more than 80 Years
Income SlabsIncome Tax Rates
Up to Rs. 5 lakhNIL
Rs. 5 lakh - Rs. 10 lakh20%
Above Rs. 10 lakh 30%

Note: 

  • Surcharge and cess will be applicable.
  • Individual residents with net taxable income less than or equal to Rs.5 lakh will be eligible for tax rebate u/s 87A under the old tax regime, i.e. tax liability will be NIL.

What Exemptions and Deductions are Available Under the New Tax Regime?

ParticularsOld Tax RegimeNew Tax regime
HRA ExemptionX
Leave Travel Allowance (LTA)X
Other allowances including food allowance of Rs 50/meal subject to 2 meals a dayX
Standard Deduction (Rs 50,000 under old regime and Rs. 75,000 under new regime)
Entertainment Allowance Deduction and Professional TaxX
Perquisites for official purposes
Interest on Home Loan u/s 24b on self-occupied or vacant propertyX
Interest on Home Loan u/s 24b on let-out property
Deduction u/s 80CX
Employee's (own) contribution to NPSX
Employer's (own) contribution to NPS
80D- medical insurance premiumX
Disabled Individual - 80UX
Interest on education loanX
Interest on Electric vehicle loanX
Donation to Political party/trust etcX
Savings Bank Interest u/s 80TTA and 80TTBX
Gifts up to Rs 50,000
Deduction for family pension (Up to Rs. 15,000 in old regime and Rs. 25,000 in new regime)
Exemption on voluntary retirement 10(10C)
Exemption on gratuity u/s 10(10)
Exemption on Leave encashment u/s 10(10AA)
Daily Allowance
Transport Allowance for a specially-abled person
Conveyance Allowance

Final Word

The old tax regime is still applicable for the current financial year and assessment year, and is not anticipated to be revoked in the near future. Taxpayers who have a lot of tax saving deductions can still opt old regime to minimize their taxes.

Frequently Asked Questions

Will old tax regime be discontinued in future?

In Budget 2023, the Finance Minister announced that new tax regime will now be the default tax regime. It sparked some concerns among taxpayers about the fate of the old tax regime. However, taxpayers should note that the old tax regime is not being discontinued, and they still have the option to opt for the old regime.

Is new tax regime better than old?

In the 2023 Budget, various tax relief measures were introduced to make the new tax regime attractive. Amongst the old and new tax regimes, which one is better will vary depending on individual circumstances. You can use this calculator to find out which regime is more beneficial for you. 

Can we switch between old and new tax regime every year?

Taxpayers not having business income can switch between the old and new tax regimes every year. However, taxpayers with business or professional income can switch only once in a lifetime.

About the Author
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CA Mohammed S Chokhawala

Content Writer
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I'm a chartered accountant, well-versed in the ins and outs of income tax, GST, and keeping the books balanced. Numbers are my thing, I can sift through financial statements and tax codes with the best of them. But there's another side to me – a side that thrives on words, not figures. Read more

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